Succession Planning 101

Monetizing Your Client Base

With another tax season behind us, many accountants are asking themselves “do I want to do this anymore? Nothing gets easier.” The Tax Cuts and Jobs Act (TCJA) created issues and unintended consequences that will take years to fully understand. The Financial Accounting Standards Board (FASB) and other pronouncement authorities continue to make things more complex in the name of making things clearer. Given this environment, perhaps you’re starting to think it may be time to find something else more enjoyable to do. If you are considering retirement, here are a few tips to follow before you do.

1. Be Your Own Best Client

Start planning ahead, which is what you’ve undoubtedly told many clients in similar situations throughout your career. The best way to maximize the value of your practice is to think ahead by at least 2-3 years. Don’t wait until the inevitable health scare. During that period, investigate firms in your area that have a common culture and outlook to yours. That culture is what clients, and your staff, will appreciate after the transition. At the end of the day, that’s what matters in securing the best deal. Your clients and staff will thank you for it.

2. Check Your Ego At the Door

You may be an extremely valuable resource to your clients, but at some point, your clients will view you as the old person in the room, with the implication that you can’t keep up anymore. This is especially possible given the scope of change with the TCJA. No one is expendable. If you weren’t around, your clients would get their advice from someone else.

3. Embrace and Leverage Technology as Much as Possible

Investing in technology will make your firm a more attractive candidate for purchase when compared to firms that don’t. As a result, you’ll likely yield better offers. Given the demographics of the baby boom, it’s a buyer’s market, and buyers want ease of transition. Those buyers will probably be much younger and technology will be second nature to them. If they can’t get an easy transition from you, they’ll get it from somewhere else. Don’t get left behind.

4. Make Sure Your Staff Has Substantial Client Contact

Shareholders should be relationship managers and handle the ‘big’ stuff, but regular communication should be handled by the team. At I&L, all clients have at least three points of contact. This will also help develop future leaders, which is an attractive feature for the acquiring firm.

Are You Ready to Retire?

Contact CPA Nerds online or call us at (586) 468-0200 for help with succession planning to ensure an easy transition.